Verizon Looks To Vanquish Yahoo Deal Following Disclosure Of Government Spy Program And Account Hacking
Verizon agreed to purchase Yahoo for $4.8 billion last July, but in the time that's passed since then and now, Yahoo's taken a beating in the press, all self-inflicted. More recently, it was reported that Verizon might be seeking a
While the two sides already agreed on terms of the deal, there's a clause that could allow Verizon to back out. The clause allows for such a move if something happens that could "reasonably be expected to have a material adverse effect on the business, assets, properties, results of operation or financial condition of the business," according to
"I think we have a reasonable basis to believe right now that the impact is material and we’re looking to Yahoo to demonstrate to us the full impact. If they believe that it’s not, then they’ll need to show us that," Verizon's general counsel stated to reporters last week.
A bad quarter with big dips in revenue could support Verizon's claim and perhaps make it easier to back out of the deal, if in fact it decides to go that route. Alternately, Yahoo could renegotiate a lower price to avoid potentially losing Verizon as a buyer altogether.